Bitcoin price on the rise: How stable is the recent increase really?

Bitcoin price on the rise: How stable is the recent increase really?

The Bitcoin price has experienced a significant upward movement in recent days, but experts warn of possible instability. The price is currently on shaky ground again, which could have significant consequences for investors and the entire crypto market. Many investors are nervous, wondering whether the recent price increases are sustainable or whether a correction is imminent. BTC-ECHO reports that the uncertainty in market sentiment is noticeable and the increased volatility could threaten the investment strategy of many investors.

These market developments occur in an economic context that is characterized by new regulatory framework conditions. In particular, the Regulation on Markets in Cryptoassets (MiCAR) was adopted in the EU on June 29, 2023. This regulation creates a uniform legal framework for crypto transactions and applies immediately in Germany, although many provisions will not become fully applicable until June 2024. According to SBS Legal, crypto service providers must meet the requirements of MiCAR, which includes proper business organization and the qualifications of appropriate business managers.

Regulatory framework and its effects

The MiCAR regulation could promote the stability of the crypto market in the long term by creating clear requirements for crypto investment advice and service providers. In Germany, crypto investment advice is already regulated and requires a license from BaFin. Providers must create special customer profiles that document the customers' financial circumstances, knowledge and risk tolerance. These profiles must be reviewed every two years.

In addition, the regulation stipulates that a detailed consultation protocol is created after each consultation. This documentation is crucial to ensure transparency and impartiality. MiCAR also prohibits provider commissions that could create potential conflicts of interest.

The role of investors

Investors looking to enter or invest in the crypto market should keep the new regulatory landscape in mind. The legislation allows companies to obtain a one-time MiCAR permit valid in all member states, which can be seen as a competitive advantage. Nevertheless, compliance with these regulations requires both time and resources. It is therefore essential for new and existing providers to quickly familiarize themselves with these regulations in order to survive in the market.

In this dynamic environment, the question remains as to how investors will react to the uncertainties of the Bitcoin price and whether the new regulations can bring the required stability. While BTC-ECHO closely follows current market developments, it remains crucial to look at the upcoming regulatory changes and their impact on the market landscape.